Staff at Southend University Hospital NHS Foundation Trust have overwhelmingly voted to ditch the Agenda for Change pay system and return to locally negotiated terms.

The highly controversial move – the first of its kind in England – has sparked fears among employers and unions that other trusts could follow suit, casting doubt on the future of national pay bargaining.

Before the introduction of Agenda for Change in October 2004, the trust had always negotiated locally, and management balloted staff earlier this year as to whether they wanted to switch back. An overwhelming 95% of the trust’s 4,000 staff voted to return to local pay deals.

Under the terms of Agenda for Change, foundation trusts are legally allowed some flexibility to negotiate pay and conditions locally. The trust, which gained foundation status on 1 June, defended its decision, saying it was responding to staff needs.

Sandra LeBlanc, acting HR director at the trust, said: “Before Agenda for Change, staff had nearly 10 years of local terms and conditions, and we decided to give them the choice whether to move back. We did that with full consultation with the unions.”

Peter Smith, director of pay modernisation at NHS Employers, said he was concerned the decision could set a precedent for other trusts.

“Having gone through the marathon process that was introducing Agenda for Change, why change back? NHS Employers is seeking to contact the trust to find out more information,” he said.

Last month, Karen Jennings, head of health at NHS union Unison, told a parliamentary health select committee that the union had “concerns about the future of Agenda for Change in national bargaining” as the roll-out of foundation trusts continued.

As a result, industrial relations problems could increase as differences in pay and training become apparent, she warned.